The 5 Pillars of Financial Health

The 5 Pillars of Financial Health

Getting on your feet financially isn’t rocket science. It’s simple, but it requires a proactive and persevering mindset. Here are five principles that apply to every person on the planet when it comes to their financial health. I call it the BISEED and you’ll see why.

1. Budget

The first step to taking charge of your finances is understanding where your money is coming from and where it’s going. Once you’ve painted this financial landscape of your situation, you’ll be ready to strategically move forward, get out of debt, and go further. The second step of budgeting, has to do with deciding what’s a priority, how you can spend less on expenses, and then plan and project your short and mid-term financial situation. There’s nothing new here. But then again, most people get budgeting right and then just stop. That’s a financially fatal mistake!

2. Invest

Your budget may not look great. Money-sucking-black-holes (personal loans!), high mortgages and lots of unexpected expenses makes you wonder, “How in the world am I ever going to get out of this!?” Glad you asked: make your money work for you. This is also how you break free from the mentality that money buys you things. Money’s power isn’t in how much it can buy—and really, it can never buy the most important things of life; love, joy and health—but money’s power rests in it’s ability to be multiplied. That’s what investing is: money multiplying.

How do you invest then? You first invest by giving because that breaks the powerful hold of money on you. And then, wherever you are, whatever the economic situation and whatever your budget—invest in any of the millions of ways you can.

Now, most people just jump in the water without knowing how to swim. Why traumatize yourself? Before you invest, spend time—days, weeks, even months—learning about investing and exploring opportunities that come your way.

3. Save

But never for the long term! Saving cash in an account will always generate a loss—we’re talking years here. But saving is an excellent strategy, not to build wealth, but to reach specific, short and mid-term goals. Saving is also good to smooth out the rough edges of your monthly and yearly budgeting cycle, as life happens and that means many unexpected expenses arise.

4. Entrepreneurial Endeavors (EEs)

A huge lie many people swallow is the belief that they’re not cut out to start or run a business. They come up with all sorts of excuses to convince themselves this, but the truth is, it’s all about what you are willing to do and learn. Being an entrepreneur is different from being an investor, because you are doing the work that you love, preferably, to earn money. Many times people jump into EEs because they have no other choice, but why wait till the pressure builds like that? (Speaking of which, I highly recommend the great movie Joy!) And why deny yourself the personal rewards of running a business? There are a virtually infinite number of ways you can start engaging in EEs. Whether you start something on the side or even grow further to the point where you quit your day job, dream big, and enjoy the journey!

5. Debt

Debt is last because if you focus on debt, it’s bound to bring you down, down, down. So before you drown, face your dragons head on. Debt is just a number, it’s not who you are. Speaking of dragons, why are you in debt? Because you spend more than you earn. So, the answer is easy, right? Spend less! Not really. Go out there and invest and make business. You’re most powerful weapon is your mind, so exercise and nurture it to grow financially. That said, the real way to get out of debt is to both increase your income (investing and EE’s or even getting a better job) AND spending less.

BISEED. Buy Seed. That’s what money is. It’s a seed, and like the seeds you sow, when handled correctly, money will multiply.